WEBVTT - Revised GOP Bill Looking More Like Obamacare, Nisen Says

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<v Speaker 1>Welcome to the Bloomberg p m L Podcast. I'm Pim Fox.

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<v Speaker 1>Along with my co host Lisa Bramowitz. Each day we

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<v Speaker 1>bring you the most important, noteworthy, and useful interviews for

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<v Speaker 1>you and your money, whether you're at the grocery store

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<v Speaker 1>or the trading floor. Find the Bloomberg p m L

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<v Speaker 1>Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Well,

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<v Speaker 1>you know, we talk a lot about some of the

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<v Speaker 1>political turmoil in Washington, from the Russia intrigue to everything else.

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<v Speaker 1>But really the most important thing, uh, that many in

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<v Speaker 1>the market are watching is the healthcare bill that the

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<v Speaker 1>GOP has been working on, and Senate Republican leaders did

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<v Speaker 1>present a revised healthcare plan today to try to gin

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<v Speaker 1>up enough support to get it past in the near terms.

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<v Speaker 1>To take a look at how it differs from previous

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<v Speaker 1>incarnations of this legislation, and I want to bring in

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<v Speaker 1>Max Neeson, Bloomberg gad Fly columnist, fabulous columnist, Reada's columns,

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<v Speaker 1>Bloomberg dot Com, slash gadfly or on the terminal, uh,

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<v Speaker 1>he joins us. Now, so, Max, how is this new

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<v Speaker 1>bill different from the old ones? And what does this

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<v Speaker 1>tell us about the direction that it's going in, so

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<v Speaker 1>we we don't yet have a full bill. We're kind

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<v Speaker 1>of working off a leaked outline UM that that seems

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<v Speaker 1>to have come from globbyists, So we'll have to kind

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<v Speaker 1>of dig into the bill text to get really all

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<v Speaker 1>the details. But what it looks like so far are

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<v Speaker 1>are a few major changes. Keeps some a c AT

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<v Speaker 1>taxes on the wealthy in order to spend more on

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<v Speaker 1>helping states cover people's out of pocket costs. UM, helps

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<v Speaker 1>with the tax treatment of health savings accounts, spending on

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<v Speaker 1>the opioid crisis, lowering premiums UM actually some programs that

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<v Speaker 1>Republicans have criticized that were part of the affordable character

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<v Speaker 1>in the first place. UM, and also in covering some

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<v Speaker 1>higher skin divid jewels UM. But it keeps Medicaid cuts

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<v Speaker 1>just about the same, which which might be an area

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<v Speaker 1>of trouble. And the thing we really still don't know

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<v Speaker 1>is to what degree UH ted cruz IDEA for basically

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<v Speaker 1>letting people buy less generous health coverage than the a

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<v Speaker 1>c A would have allowed. UM. We don't know how

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<v Speaker 1>much of that's going to be included yet, But does

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<v Speaker 1>this give us any indication of which direction it's moving

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<v Speaker 1>in and sort of which factions are gaining the most

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<v Speaker 1>cloud in these negotiations. So the kind of interesting thing

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<v Speaker 1>here is that it's it's this sort of bizarre compromise

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<v Speaker 1>where everyone gets a little and we're not exactly sure

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<v Speaker 1>how much everyone gets. Um So I think that's what

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<v Speaker 1>might give it a little bit of difficult even though

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<v Speaker 1>they're kind of shifting things around to kind of meet

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<v Speaker 1>that fifty vote margin. I mean, it's not a good

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<v Speaker 1>sign that, you know, there they didn't do anything to

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<v Speaker 1>ameliorate the Medicaid cuts when that's a huge issue for

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<v Speaker 1>a lot of the potential moderate no votes. Conservatives might

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<v Speaker 1>be angry that this basically rose a lot of money

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<v Speaker 1>at some of the issues in it, which is just

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<v Speaker 1>a general kind of ideological point that they don't agree with,

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<v Speaker 1>and they might not get that kind of cruisily amendment

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<v Speaker 1>in the version that they wanted. And the fact that

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<v Speaker 1>Lindsay Graham and Bill Cassidy went on TV a few

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<v Speaker 1>minutes before the Republicans were set to have a meeting

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<v Speaker 1>about this bill and pitch their own alternative to this bill.

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<v Speaker 1>So it's kind of still everything is still up in

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<v Speaker 1>the area. Um. I just guess I'm trying to just

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<v Speaker 1>absorb the concept that we're basically watching the horse trading

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<v Speaker 1>in real time? Is that is that kind of where

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<v Speaker 1>I mean, that's just seems so otherworldly, but I guess

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<v Speaker 1>that's the way it goes, right, It's absolutely accurate. And um,

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<v Speaker 1>it's kind of been the case the entire lifespan of

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<v Speaker 1>this bill, both in the House and the Senate, and

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<v Speaker 1>and it's just seems to be particularly active horse trading

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<v Speaker 1>right now, where um, not only do you know, senators

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<v Speaker 1>don't know what's going to be in the bill that's

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<v Speaker 1>going to be possibly released to this day, and they're

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<v Speaker 1>doing it to themselves right because it's it was about

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<v Speaker 1>ten GOP senators that we're holding up the works, and

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<v Speaker 1>then they you know, they were horse trading. For example,

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<v Speaker 1>I remember Susan Collins, I believe Maine Republican from Maine,

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<v Speaker 1>uh wanted more money for the opioid crisis in May. Yes,

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<v Speaker 1>so there was a lot of different senators that wanted

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<v Speaker 1>that particular bit. But yeah, it's when you have a

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<v Speaker 1>small group of people writing something a process that's not

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<v Speaker 1>that transparent. Um, you know, you you kind of see

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<v Speaker 1>the reason that they did that is they're trying to

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<v Speaker 1>move quickly to kind of move forward their legislative agenda.

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<v Speaker 1>But it's sort of backfired because when you don't have

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<v Speaker 1>an open process, you have people to get surprised, and

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<v Speaker 1>then you know, they come out with demands and then

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<v Speaker 1>you have to make these last minute little shifts. And

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<v Speaker 1>with something is complicated as as healthcare legislation, you obviously

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<v Speaker 1>run into some issues. You know. I was looking at

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<v Speaker 1>some polls recently about the general favorability ratings of the

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<v Speaker 1>A c A and how it's actually gone up pretty

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<v Speaker 1>substantially over the past few months. UM, And I'm wondering

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<v Speaker 1>whether that will complicate things. The fact that there is

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<v Speaker 1>greater favorability feeling towards the current system then there has

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<v Speaker 1>been in the past were complicate things if UH senators

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<v Speaker 1>do go on recess and do go back to their

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<v Speaker 1>districts and end up having conversations with people who suddenly

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<v Speaker 1>have have a better feeling about this. And by the way,

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<v Speaker 1>we're getting a redhead right now, we're getting a headline

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<v Speaker 1>center Republicans have released the updated draft the healthcare bill.

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<v Speaker 1>So I am sure that MAXI will go back to

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<v Speaker 1>your seat and scrutinize every passage. But you know what

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<v Speaker 1>I'm saying, though, right and your day was just you

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<v Speaker 1>and your evening, I would imagine evening. But it's already

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<v Speaker 1>complicating things. I mean, people are looking ahead to and

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<v Speaker 1>over kind of lifespan of the bill. It's moved kind

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<v Speaker 1>of ever closer to the A C. A it's not.

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<v Speaker 1>You know that this is much closer to the A

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<v Speaker 1>C than what the housepell was, particularly when you look

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<v Speaker 1>at how the like subsidies and tax credits are structured.

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<v Speaker 1>So the other the other thing that people are really

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<v Speaker 1>watching is whether there is any cohesion among the Republican senators, uh,

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<v Speaker 1>and whether there has been any kind of melding of minds.

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<v Speaker 1>I mean, you talk about, you know, Senator Graham releasing

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<v Speaker 1>his own healthcare bill before going into a meeting to

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<v Speaker 1>talk about the ongoing negotiations. But I wonder, you know,

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<v Speaker 1>just from a market perspective, what people are looking for

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<v Speaker 1>is what does this mean about fiscal stimulus, about other

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<v Speaker 1>sort of market friendly activities in a tax bill. Um,

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<v Speaker 1>Are we getting any sense that there is some kind

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<v Speaker 1>of consensus building among the Republican factions or is it

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<v Speaker 1>splintering further. You know, you know, if anything, it's the opposite.

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<v Speaker 1>And I think what revealed that the most was the

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<v Speaker 1>fact that after they pulled the initial version of the

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<v Speaker 1>Senate bill they were going to vote on it, they

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<v Speaker 1>decided not to. Um, just a whole bunch of senators

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<v Speaker 1>jumped out of the woodwork and said, I'm definitely not

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<v Speaker 1>going to vote for this, even people that previously had

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<v Speaker 1>been counted as pretty votes. You know, on one hand,

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<v Speaker 1>you have to discount that a little bit, because you know,

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<v Speaker 1>the bill was dead in its current form. It's not

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<v Speaker 1>like they were taking a vote or a major stand.

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<v Speaker 1>But it also indicates that that pretty clearly there um

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<v Speaker 1>some fractions, some divisions. People aren't willing to just fall

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<v Speaker 1>in line up behind leadership because they said this is

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<v Speaker 1>what we need to do. I just wanna veer you

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<v Speaker 1>off course from the health bill because I know you're

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<v Speaker 1>going to spend the rest of your day doing that.

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<v Speaker 1>But just about about this cancer breakthrough, I mean, this

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<v Speaker 1>is something Can you just explain it what we've learned? Yeah? Absolutely,

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<v Speaker 1>And I have a column coming out later today on this,

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<v Speaker 1>and it's actually really a pretty stunning treatment. Basically, what

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<v Speaker 1>they do is for a group of patients that um,

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<v Speaker 1>you know, really have failed other treatments and would likely

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<v Speaker 1>die without it. What they're able to do is take

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<v Speaker 1>out their imman cells, modify them, and inject them back

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<v Speaker 1>into the body of people with the really serious blood

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<v Speaker 1>cancer and in some patients that can very literally wipe

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<v Speaker 1>out that cancer. Um, it's really quite amazing. Sing. The

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<v Speaker 1>question is whether it's commercially viable. Um. You know, it

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<v Speaker 1>has to be made specifically for each patient. It's likely

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<v Speaker 1>to cost many hundreds of thousands of dollars um. You know,

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<v Speaker 1>it's it's unprecedented in that way as well. So it's

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<v Speaker 1>gonna be really fascinating to fall over the next couple

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<v Speaker 1>of years. And we're gonna want to read your column

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<v Speaker 1>about this because I know you're gonna give us details,

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<v Speaker 1>tell us about who did it in the companies and

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<v Speaker 1>so on. Thank you very much, Max Needson, Gadfly columnists

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<v Speaker 1>Time Pim Fox along with Lisa Abramowitz and a very

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<v Speaker 1>extensive bit of questioning Lisa Abramowitz and I thought very

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<v Speaker 1>appropriate at the end when a chair Yellen was asked

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<v Speaker 1>would she accept an appointment, you know, to be reappointed,

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<v Speaker 1>and there was that pause just beforehand and a couple

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<v Speaker 1>of very pointed questions. Everyone wanted her to basically weigh

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<v Speaker 1>in on this, and Carl Kadana, who is chief US economist,

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<v Speaker 1>we're gonna let him in on this. Well, you know

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<v Speaker 1>he was. He was making the argument yesterday to us

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<v Speaker 1>off air that this would be the time for her

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<v Speaker 1>to actually make a statement about whether or not she

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<v Speaker 1>think you only, yeah, we kind of bet that here

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<v Speaker 1>so he can weigh in on the surprise I got

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<v Speaker 1>because Carl is hardly ever wrong. However, yeah, Carlon knows.

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<v Speaker 1>So the terms of the bet were a cup of coffee, right,

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<v Speaker 1>that's right, So I'll meet you downstairs for a cup

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<v Speaker 1>of coffee. Yea perfect um. No, This, in contrast to

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<v Speaker 1>the post meeting statements and press conferences, uh now, would

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<v Speaker 1>have been a yeah. I think a good time for

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<v Speaker 1>her to show her hand. Obviously, fed continuity is so

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<v Speaker 1>critical at this point, and there's basically six months left

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<v Speaker 1>in her terms, so I think that before Gary Cohne

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<v Speaker 1>takes over, well before her term expires, will say on

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<v Speaker 1>February three. Uh, and so you know it's important at

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<v Speaker 1>some point, you can't don February two. Finally, reveal your intentions,

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<v Speaker 1>especially with such high stakes right now, do you say never?

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<v Speaker 1>You said you can never say never? You never say never.

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<v Speaker 1>It would be I'll say it would be a bad

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<v Speaker 1>idea to wait until the last right. We need to

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<v Speaker 1>know what course the Feds on with the balance sheet

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<v Speaker 1>with interest rates, uh you know, keeping markets as calm

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<v Speaker 1>as possible as they tried to normalize policy in an

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<v Speaker 1>economy that's uh performing so so uh so the Fed

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<v Speaker 1>wants to be transparent, don't save a big surprise for

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<v Speaker 1>the last minute at some point, And she didn't have

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<v Speaker 1>to do it today, but the clock is ticking and

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<v Speaker 1>it will soon be appropriate for her to express her intentions, Carl. Yesterday,

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<v Speaker 1>the market was interpreting Janet Allen's statements as being dovish.

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<v Speaker 1>Is being a sort of conducive to an ongoing rally

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<v Speaker 1>and risk assets as well as an ongoing rally and

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<v Speaker 1>government at everything is great. The world is in the

0:10:59.320 --> 0:11:02.679
<v Speaker 1>goldilocks area today it's different. Today. We're seeing somewhat of

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<v Speaker 1>a sell off in von Marcus. Is this people basically

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<v Speaker 1>taking a step back and saying she really hasn't made

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<v Speaker 1>any material changes or is this not related to her

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<v Speaker 1>testimony at all. I don't think today's move is too

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<v Speaker 1>heavily related to her testimony. I think the market interpretation

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<v Speaker 1>yesterday that she was sounding more dovish, incrementally more dovish

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<v Speaker 1>h than she did at the June meeting press conference.

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<v Speaker 1>I think that was a correct interpretation. And the Fed

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<v Speaker 1>is UH being more ponderous about potential disinflation threats. I yeah,

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<v Speaker 1>earlier today looked back to what see what the Fed's

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<v Speaker 1>report card on the inflation mandate was over Cherry Yellen's term. UH,

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<v Speaker 1>And if we go back to fourteen and look at

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<v Speaker 1>either the PC deflator or the core PC deflator, basically

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<v Speaker 1>they have missed the entire time. There was one month

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<v Speaker 1>during Janet Yellen's FED term as chair where the headline

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<v Speaker 1>PC deflator, which is the objective they're trying to not

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<v Speaker 1>hit two percent with, actually was at two percent or better.

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<v Speaker 1>The rest of the term they have missed. In fact,

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<v Speaker 1>if we go back and look from two thousand and

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<v Speaker 1>nine to present, UH, the FED has missed the two

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<v Speaker 1>percent inflation mandate on the court inflator percent of the

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<v Speaker 1>time you look at the headline, it's eight percent. You know,

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<v Speaker 1>if carbon Kadana were an economic was an economics professor,

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<v Speaker 1>and he could certainly be. He would never let anybody slide,

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<v Speaker 1>not even a little. He is he you hold their

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<v Speaker 1>feet to the great high. Can I just point out

0:12:44.520 --> 0:12:46.240
<v Speaker 1>something though, that if you take a look at what's

0:12:46.240 --> 0:12:48.319
<v Speaker 1>going on in equity markets right now. I know you're

0:12:48.360 --> 0:12:50.880
<v Speaker 1>worried about your bonds, but you know you had that

0:12:51.000 --> 0:12:53.439
<v Speaker 1>big sell off a couple of weeks ago. I marked

0:12:53.440 --> 0:12:56.160
<v Speaker 1>that because that's when you leave, you leave whenever. That's

0:12:56.200 --> 0:12:58.880
<v Speaker 1>the best indicators when you leave the bond market tanks.

0:12:59.480 --> 0:13:01.840
<v Speaker 1>And then we've seen this run up, and now we've

0:13:01.840 --> 0:13:04.000
<v Speaker 1>seen yields kind of back up a little bit because

0:13:04.000 --> 0:13:06.679
<v Speaker 1>everyone went, oh, Okay, maybe maybe we're not going to

0:13:06.800 --> 0:13:09.160
<v Speaker 1>get this raise right because she's delish. Take a look

0:13:09.200 --> 0:13:12.240
<v Speaker 1>at stocks today. Stocks are up very very little, but

0:13:12.320 --> 0:13:14.920
<v Speaker 1>they're up. And that's very important because that's what they

0:13:14.960 --> 0:13:17.040
<v Speaker 1>I believe it has to do with what's called an

0:13:17.080 --> 0:13:19.280
<v Speaker 1>inside day, because it has to do with a lot

0:13:19.320 --> 0:13:22.560
<v Speaker 1>of market technicals that have to do that demonstrate buying

0:13:22.679 --> 0:13:27.000
<v Speaker 1>and selling, strength and pressure. And the couple with your

0:13:27.040 --> 0:13:31.559
<v Speaker 1>point about emerging market debt, which chair Yellin spoke about,

0:13:31.720 --> 0:13:34.840
<v Speaker 1>or said she spoke about um. I want to know

0:13:35.360 --> 0:13:39.040
<v Speaker 1>Lisa Brownwoods from you. There were a couple of questions

0:13:39.080 --> 0:13:41.720
<v Speaker 1>there about the financial crisis that brought up the words

0:13:41.760 --> 0:13:44.520
<v Speaker 1>Bear Stearns and Lehman Brothers. I mean, come on, of

0:13:44.559 --> 0:13:46.839
<v Speaker 1>course there is and you've got the Financial Committee, but

0:13:46.880 --> 0:13:48.880
<v Speaker 1>there was anything they're going to bring up the crisis.

0:13:48.960 --> 0:13:51.760
<v Speaker 1>And then they talked about glass Stiegel and they asked

0:13:51.800 --> 0:13:55.360
<v Speaker 1>about the reinstatement with a possible reinstatement of glass Steel.

0:13:55.360 --> 0:13:59.720
<v Speaker 1>And I'm wondering what you thought, because it's almost as

0:13:59.720 --> 0:14:03.200
<v Speaker 1>if are yelling came back and said, yes, it was

0:14:03.240 --> 0:14:06.439
<v Speaker 1>that there was a long pause before she answered that question.

0:14:07.120 --> 0:14:09.480
<v Speaker 1>You know, honestly, I think that it's it's nice to

0:14:09.520 --> 0:14:12.199
<v Speaker 1>pontificate on on that particular thing. I think it doesn't

0:14:12.200 --> 0:14:14.200
<v Speaker 1>really matter though, to be honest, I mean, it's sort

0:14:14.200 --> 0:14:17.360
<v Speaker 1>of like that. It's nice. They're they're basically grandstanding, right,

0:14:17.400 --> 0:14:21.080
<v Speaker 1>And I think that as far as the senators, the senators,

0:14:21.080 --> 0:14:22.960
<v Speaker 1>and she's trying to respond in a way that's the

0:14:23.080 --> 0:14:29.280
<v Speaker 1>least destructive as possible. Carl, I mean, but that's what well, Carl,

0:14:29.320 --> 0:14:31.240
<v Speaker 1>I mean, you've even that's one of the that goes

0:14:31.280 --> 0:14:32.960
<v Speaker 1>to the heart of what you're saying, which is that

0:14:33.440 --> 0:14:37.120
<v Speaker 1>the presentation to the audience that may maybe not matter more,

0:14:37.200 --> 0:14:40.480
<v Speaker 1>but matter as much, which is the financial community and

0:14:40.520 --> 0:14:42.480
<v Speaker 1>the people who have to live and breathe all this

0:14:42.560 --> 0:14:47.120
<v Speaker 1>stuff that they need more than just what leases describing

0:14:47.160 --> 0:14:51.640
<v Speaker 1>as kind of this what did you say a grand Uh.

0:14:51.760 --> 0:14:54.800
<v Speaker 1>She's not trying to deliver soundbites here, so she's not

0:14:54.880 --> 0:14:57.560
<v Speaker 1>going to say, yes, bring back last Stiegel, So she

0:14:57.680 --> 0:15:01.920
<v Speaker 1>instead gives a very crap the answer that the meanders

0:15:01.960 --> 0:15:06.160
<v Speaker 1>around and talks about regulations on banking and uh, preventing

0:15:06.360 --> 0:15:08.960
<v Speaker 1>the next financial crisis and whatnot. But back to the

0:15:09.000 --> 0:15:13.720
<v Speaker 1>original point on because and what you're highlighting here is

0:15:13.760 --> 0:15:17.120
<v Speaker 1>this focus on financial stability risks, which is one of

0:15:17.120 --> 0:15:20.120
<v Speaker 1>the moting motivating factors for the FED. Uh. My. My

0:15:20.280 --> 0:15:25.040
<v Speaker 1>contrary point is that they have missed on core inflation

0:15:26.120 --> 0:15:29.720
<v Speaker 1>of the time uh since the Great Recession. Uh. Now

0:15:29.800 --> 0:15:32.200
<v Speaker 1>you have inflation backsliding at the same time that the

0:15:32.200 --> 0:15:36.080
<v Speaker 1>FED is ramping up the pace of tightening. It's very hard.

0:15:36.440 --> 0:15:41.000
<v Speaker 1>The FED is very sensitive to its inflation credibility. Uh,

0:15:41.000 --> 0:15:43.480
<v Speaker 1>and I think that they risk seeding some of that

0:15:43.560 --> 0:15:48.400
<v Speaker 1>credibility if inflation is backsliding. You've been below target of

0:15:48.480 --> 0:15:51.720
<v Speaker 1>the time, and now you're accelerating the pace of tightening.

0:15:51.800 --> 0:15:54.480
<v Speaker 1>So if you want to say there's symmetric uh, you know,

0:15:54.480 --> 0:15:57.120
<v Speaker 1>a symmetric focus on that two percent inflation target and

0:15:57.160 --> 0:16:02.480
<v Speaker 1>you've missed. Yeah. The other student in the class, Lisa Bromwitz,

0:16:02.480 --> 0:16:06.080
<v Speaker 1>has a question, sure, real quick. I think that underlying

0:16:06.160 --> 0:16:08.640
<v Speaker 1>all of her testimony was who is going to be

0:16:08.720 --> 0:16:12.120
<v Speaker 1>her successor? We've gotten some names, including Gary Cohne, who

0:16:12.160 --> 0:16:16.240
<v Speaker 1>I somewhat flippantly mentioned before, former chief operating officer of

0:16:16.320 --> 0:16:18.520
<v Speaker 1>Woman Sex. Who do you think is the most likely

0:16:18.760 --> 0:16:21.640
<v Speaker 1>next fight chair? Well, I mean the fact that we're

0:16:21.680 --> 0:16:24.360
<v Speaker 1>hearing Gary Cohn's name so much, I think means that

0:16:24.360 --> 0:16:27.160
<v Speaker 1>that could be he could be a prime candidate. I

0:16:27.200 --> 0:16:30.760
<v Speaker 1>think also New York Fed President Bill Dudley that could

0:16:30.800 --> 0:16:35.120
<v Speaker 1>be a potential candidate. He would be yelling too, so

0:16:35.200 --> 0:16:39.440
<v Speaker 1>to speak, because he does have a devish policy inclination. Uh.

0:16:39.520 --> 0:16:42.480
<v Speaker 1>It could be someone from the current Board of Governors,

0:16:42.520 --> 0:16:44.960
<v Speaker 1>but it just I don't say any names jumping out

0:16:45.640 --> 0:16:47.680
<v Speaker 1>at that point. So you have to be on the

0:16:47.720 --> 0:16:49.400
<v Speaker 1>Board of Governors to be chair. So that would mean

0:16:49.400 --> 0:16:51.880
<v Speaker 1>President Dudley would have to be appointed into one of

0:16:51.880 --> 0:16:55.320
<v Speaker 1>the governor's seats. So there seems to be this game

0:16:55.320 --> 0:17:00.840
<v Speaker 1>of chicken with yelling at exactly. Rickadonna, thank you so

0:17:00.920 --> 0:17:03.680
<v Speaker 1>much for joining us. Actually important always to get your

0:17:03.720 --> 0:17:10.280
<v Speaker 1>insights at Carcadona's chief US economist for Bloomberg Intelligence. Thanks

0:17:10.320 --> 0:17:12.919
<v Speaker 1>for listening to the Bloomberg P and L podcast. You

0:17:12.960 --> 0:17:16.760
<v Speaker 1>can subscribe and listen to interviews at Apple Podcasts, SoundCloud,

0:17:16.880 --> 0:17:20.320
<v Speaker 1>or whatever podcast platform you prefer. I'm pim Fox. I'm

0:17:20.359 --> 0:17:24.360
<v Speaker 1>on Twitter at pim Fox. I'm on Twitter at Lisa Abramo.

0:17:24.480 --> 0:17:27.080
<v Speaker 1>It's one before the podcast. You can always catch us

0:17:27.119 --> 0:17:28.720
<v Speaker 1>worldwide on Bloomberg Radio